Quarterly report pursuant to Section 13 or 15(d)

Debt and Credit Arrangements

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Debt and Credit Arrangements
3 Months Ended
Mar. 31, 2014
Debt and Credit Arrangements [Abstract]  
Debt and Credit Arrangements

12 - Debt and Credit Arrangements

At March 31, 2014 the Company had a $75 million credit facility consisting of a $25 million revolving credit line and a $50 million 5-year term loan with Wells Fargo Bank, National Association (“Wells Fargo”). The $25 million credit line is fully available under the credit agreement. The credit facility contains covenants, including covenants relating to liquidity and other financial measurements, and provides for events of default, including failure to pay any interest when due, failure to perform or observe covenants, bankruptcy or insolvency events, and the occurrence of a material adverse effect, and restricts our ability to pay dividends. We are in compliance with all covenants as of March 31, 2014. We have granted Wells Fargo a security interest in substantially all of our assets. We have no other significant credit facilities.

During the first quarter 2013 we borrowed $22 million under the credit facility principally to fund the Grass acquisition and to provide for other working capital needs. We had no additional borrowings..

The credit facility was increased to $75 million in June 2013 and the term was extended to five years. As part of the amended credit facility in June 2013, we converted $31.2 million of short-term revolving debt to a term loan, increasing the term loan from $18.8 million as of March 31, 2013 to $50 million as of June 30, 2013.

During the fourth quarter of 2013 and the first quarter of 2014 additional principal payments of $7.5 million and $5.0 million were made respectively. As a result of these additional principal payments the final payment on this term loan is scheduled to be made on or about June 30, 2017.

Long-term debt is comprised of the following (2014 and 2013 columns in thousands):

 

March 31, 2014

December 31, 2013

Term loan $50 million, interest at LIBOR plus 1.75%, due September 30, 2018 with term loan principle repayable in quarterly installments of $2.5 million

$32,500

$37,500

Term loan $2.9 million Canadian (“CAD”), interest at cost of funds plus 2.5%, due September 15, 2014 with principle repayable in monthly installments of $16,000 until August 15, 2014 and one final payment of $404,000 collateralized by a first lien on company owned land and building

437

517

Total

32,937

38,017

Less: current portion of long-term debt

(10,437)

(10,517)

Total long-term debt

$22,500

$27,500

 

Maturities of long-term debt as of March 31, 2014 are as follows (in thousands):

 

 

 

Nine months ended December 31, 2014

$

 

7,937

2015

 

 

10,000

2016

 

 

10,000

2017

 

 

5,000

Total Total long-term debt

$

 

32,937

 

At March 31, 2014 and December 31, 2013, the carrying value of total debt approximates fair market value. The fair value of the Company’s debt is considered a Level 2 measurement.